My distance of choice when torpedoing those juicy freighters is between 1000 meters and 2500 meters - but that is only because I prefer those G7 torpedos, which are homing torpedoes, and compensate for misjugments in distance, speed and angle on the bow. Straight running torpedoes, preferably, should be shot as close as possible (respecting minimum arming distance, which is around 500 meters) since as targets are farther away, there is much more room for misses. Even in auto-targeting. For manual targeters as myself, the problem is even greater since a small misjugment in the target's speed (say, it is actually running 7 kts and you imput 5) makes the torpedo miss the targed by several hundred yards, or more.
Of course, circumstances will dictate how close you get to the target. Cargo ships cruising all by themselves in the middle of the indic ocean are simply begging to be sunk, and surprisingly, there are a lot of them. Choose them as your primary target for now, until you develop higher skills. Get in front of them, circling from afar so that you are not spoted. Then dive to periscope depth about 5 quilometers ahead of the target, and position yourself in a manner where it will be in front of you when it as it passes by, some 1500 meters away. If you do that without being spotted, it will keep saling slowly in a straight line just in front ouf you, and a hit will be easier. If you act too anxious and manage to be spoted, the ship will immediately speed up its engines, and start sailing in a evasive pattern - diminishing your chances of a succesful hit.
Getting your torpedoes to hit the target is more a matter of tactics, then it is of aiming and shooting. Because the first rule is to get as close as possible, in a confortable position to gather the target's info, without being detected. How to do that with escorts bouncing you all over the place, now that's the real deal, so avoid this kind of combat until you feel you are more experienced.
About that dive depth there... 1000 meters is a lot, isn't it? Apart from specialized vehicles (recovery, etc), military subs even today can't dive further than 500 meters more or less - or at least that's what you find out playing sonalists' "dangerous waters" or "sub command" for instance, which are games you could consider checking out. Just a hint: if you find autotargeting hard, you will go crazy when you learn about something called "TMA" (target motion analisys) in modern subs.